2019

Read latest tax related or accounting news. We have gathered together some of the best tax news from trusted sources and made it easier for you keep up to date the latest events in tax world.

Distribution by former S corporation is part dividend

In Rev. Rul. 2019-13, the IRS ruled that a distribution to the sole shareholder of a C corporation was partly a recovery of the former S corporation’s accumulated adjustments account (AAA) and a taxable dividend for the remaining distribution. The company involved was originally a C corp...

IRS changes maximum-vehicle-value rule

The IRS intends to revise its regulations to make them consistent with the recent statutory changes to the automobile price inflation adjustment in Sec. 280F(d)(7), which affect the vehicle value that applies when valuing employees’ personal use of employer-provided vehicles (Notice 2019...

Proposed rules would govern withholding on transfers of partnership interests

The IRS issued proposed regulations (REG-105476-18) on the operation of new Sec. 1446(f), which requires withholding on the transfer of a partnership interest described in Sec. 864(c)(8) (gain or loss of foreign persons from the sale or exchange of certain partnership interests). Sec. 1446(f) ...

More proposed regs. on qualified opportunity funds issued

The IRS issued more proposed regulations (REG-120186-18) on Sec. 1400Z-2, a new provision added by the law known as the Tax Cuts and Jobs Act, P.L. 115-97, that establishes qualified opportunity funds (QOFs) to encourage investments in low-income communities. Sec. 1400Z-2 offers three federal ...

Can a state tax a trust based on the beneficiary’s residency?

On Tuesday, the U.S. Supreme Court heard oral arguments in the case of North Carolina Dep’t of Rev. v. Kimberley Rice Kaestner 1992 Family Trust, No. 18-457 (U.S.). The case involves a North Carolina statute (N.C. Gen. Stat. §105-160.2) that allows a trust to be taxed sole...

Safe harbor issued for valuing pro sports trades

Professional sports teams that trade player contracts or draft picks will not have to value the contracts or draft picks when determining their gain or loss on the trade under a safe harbor issued by the IRS on Thursday (Rev. Proc. 2019-18). The guidance allows teams to treat certain personnel...

AICPA asks government to issue more QBI deduction guidance

On April 9, Annette Nellen, the chair of the AICPA Tax Executive Committee, sent a letter to Treasury and to the IRS Chief Counsel’s Office asking for additional guidance on the Sec. 199A deduction for qualified business income (QBI) beyond the corrected final regulations (T.D. 9847) and...

Tax treatment of state and local tax refunds clarified

Rev. Rul. 2019-11, issued Friday, the IRS addressed how the long-standing tax benefit rule interacts with the new $10,000 limit on deductions of state and local taxes to determine the portion of any state or local tax refund that must be included on the taxpayer's federal income tax return. Se...

Procedure for obtaining EINs to change May 13

Beginning May 13, the IRS will accept employer identification number (EIN) applications only from individual taxpayers who have either a Social Security number or an individual taxpayer identification number as the responsible party on the EIN application, the IRS announced on Wednesday (IR-20...

Final rules issued on penalty for nondisclosure of reportable transactions

The IRS on Tuesday issued guidance regarding the amount of the Sec. 6707A penalty for failure to disclose reportable transaction information (T.D. 9853). Tuesday’s final regulations adopt a definition of “decrease in tax” for Sec. 6707A purposes and provide guidance for situa...

IRS expands relief from underpayment penalty

The IRS announced on Friday that it is amending Notice 2019-11 to lower the amount of tax that an individual must have paid in 2018 to avoid the underpayment of estimated income tax penalty to 80% (Notice 2019-25). The change was made after concerns were raised that the earlier relief, which l...

Proposed rules issued for information reporting for life insurance contract transactions

The IRS proposed regulations (REG-103083-18) under Sec. 6050Y, which governs reporting obligations for reportable policy sales of life insurance contracts and payments of reportable death benefits. The rules also provide guidance on the amount of death benefits excluded from gross income under...

IRS reevaluating active trade or business requirement for spinoffs

The IRS announced on Thursday that it is reviewing its approach to the active trade or business requirement that must be met for a five-year period for a business to qualify for a tax-free spinoff under Sec. 355 and, as a result, is suspending two revenue rulings, Rev. Ruls. 57-464 and 57-492,...

IRS’s Dirty Dozen scams — 2019 edition

As it has done for several years now, the IRS issued an updated list of “Dirty Dozen” tax scams for 2019. For the third year in a row one of the biggest scams is phishing attempts. Phone scams also figure prominently, with criminals making threatening phone calls to innocent taxpay...

First-year challenges of TCJA implementation require broader penalty relief

As the first filing season that implements the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, moves forward, many taxpayers are becoming frustrated to learn that their refunds are smaller or they owe money for the first time. The substantial uncertainty surrounding the TCJA’...

Opportunities beckon in new qualified opportunity zones

As part of the legislation known as the Tax Cuts and Jobs Act,[i] Congress enacted two companion provisions designed to encourage investment and economic growth in certain low-income communities. First, Sec. 1400Z-1 paved the way for more than 8,700 such low-income communities and qualifying c...

Treasury announces changes to tax regulatory process

The Treasury Department and the IRS announced on Tuesday that they are making changes to their guidelines for issuing tax guidance, including adding a statement of good cause to temporary regulations and restricting notices of proposed regulations. The “Policy Statement on the Tax Regula...

Guidance proposed on FDII and GILTI deductions

The IRS issued guidance on determining the amount of the deduction for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI) under Sec. 250 (REG-104464-18). Tuesday’s proposed regulations also detail how taxpayers coordinate the FDII and GILTI provisions...

Court upholds IRS PTIN fees

The IRS has authority to charge a user fee for preparer taxpayer identification numbers (PTINs) a federal appeals court held on Friday, paving the way for the agency to reinstate the charges for obtaining and renewing a PTIN (Montrois, No. 17-5204 (D.C. Cir. 3/1/19)). A valid PTIN is required ...

Times have changed; professional standards should, too

Times have changed; professional standards should, too By Henry Grzes, CPA Related TOPICS Tax practitioners have seen shifts in the way they do business during the last decade. As a result, the standards that practitioners rely on ...